In less than a decade, the dollar has transformed steadily from being the Euro’s bigger, stronger older sibling to its undeniably weaker and more volatile counterpart. But it never seemed to matter all that much – until now.

France and Germany’s recent and rather unexpected exit from recession brought glimmers of hope that the global recession would soon be ending; the European Union announced yesterday that it anticipates the entire European Union will achieve third-quarter economic growth. The Euro has grown more valuable against the dollar in only a period of a few hours following this announcement, marking the dollar’s year-low against the European currency.

While news of a weak dollar has always been mildly disconcerting, analysts have been quick to point out that there are advantages to being the underdog. Take this NPR article from 2007, for example, in which Eric Weiner pointed out the economic benefits of a weak dollar: cheaper American exports help close the trade deficit, a boost for American tourism, and U.S. manufacturers experience a boon because they can produce their goods more cheaply.

Today, however, the dichotomy between the U.S. and European currencies is far more difficult to explain as a double-edged sword. The freefall of the dollar is ultimately both a reflection of and a catalyst to investors’ waning trust in American currency, and furthermore, a representation of the poor health of the American economy relative to similarly wealthy nations who are on the brink of recovery. America’s massive debts are beginning to affect the appeal of the dollar to a potentially dire degree.

“If we continue to borrow from foreign countries to sustain our [government] spending, eventually there will come a time when asset holders around the world will begin to wonder whether the U.S. is creditworthy,” Wharton School of Business professor Richard C. Marston explained. The weak dollar no longer simply signifies more expensive trips to European countries – it’s now a major liability to the reputation of the American economy.